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“MEDICARE ANTI-FRAUD EFFORTS: HOSPITALS BACKING OFF UP-CODING” mentioning the U.S. Dept. of Justice was published in the Extensions of Remarks section on pages E643 on April 14, 1999.
The publication is reproduced in full below:
MEDICARE ANTI-FRAUD EFFORTS: HOSPITALS BACKING OFF UP-CODING
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HON. FORTNEY PETE STARK
of california
in the house of representatives
Wednesday, April 14, 1999
Mr. STARK. Mr. Speaker, for the past 14 years, hospitals have been up-coding their Medicare bills. Each year, the ``complexity'' of the cases that hospitals treat is said to increase. Like grade creep in a school, the way patients' illnesses are graded in a hospital gradually creeps upwards, and the taxpayer and Medicare pay more and more.
Last year, for the first time, the ``complexity'' of the cases declined.
As the following memo makes clear, this has something to do with the Administration's fight against waste, fraud, and abuse in Medicare and in the well-publicized case against Columbia-HCA.
Taxpayers and Medicare beneficiaries should congratulate HCFA, the HHS Inspector General, and Justice for their efforts. Vigilance against fraud is a major reason that the life of the Medicare hospital trust fund has just been extended from 2008 to 2015.
Date: November 19, 1998From: Office of the ActuarySubject: Analysis of PPS Hospital Case-Mix Change between
1997 and 1998
The prospective payment system, PPS, uses diagnosis related groups, DRG's, as the basis of payment. Each DRG is assigned a relative weight which is used in the payment formula. Average case-mix is the discharge-weighted mean of all the DRG relative weights. We have monitored changes in case-mix since the beginning of PPS in FY 1984. From FY 1983 through FY 1997, case-mix increased every year. FY 1998 is the first year we have measured a decrease in case-mix.
Based on information available through October 1998, we have measured a change in PPS hospital case-mix in FY 1998 of
-0.74 percent. When we receive further updates for FY 1998, we estimate that the final measure of the FY 1998 case-mix increase will be in the neighborhood of -0.5 percent. Since FY 1998 is the first year that case-mix has decreased under PPS, I have undertaken a study of the reasons for this decrease. My study found the following:
As is usually the case, some DRG's contributed to an increase in case-mix while others contributed to a decrease.
The new DRG's for back and neck procedures increased case-mix 0.05 percent.
The redefinition of DRG 116 in combination with DRG 112 increased case-mix 0.59 percent.
The change in coding of pneumonia cases decreased case-mix 0.23 percent.
DRG's in complex-noncomplex pairs decreased case-mix 0.82 percent.
Non-pair DRG's decreased case-mix 0.27 percent.
While assessing cause-and-effect is always difficult, I believe that some of the decrease in case-mix is likely to be attributable to certain efforts to combat fraud and abuse. The Department of Justice investigation of the Hospital Corporation of America, subsequent indictments, and the possibility of triple damages may have prompted hospitals to code diagnoses less aggressively--resulting in fewer complex cases. Similarly, the inspector general's investigation of pneumonia cases may have caused the significant shift of admissions from the more expensive respiratory infections DRG's to the simple pneumonia DRG's. HIPAA provides continuing funding for fraud investigations, which may have a continuing impact on increases in case-mix.
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